CryptoKitties Maker Doubles Valuation in Venrock-Led Fundraising

(Bloomberg) -- The company behind the popular game CryptoKitties is raking in cash from venture capitalists faster than its users can churn out virtual cats.

Dapper Labs announced Thursday it's finished a $15 million fundraising led by Venrock, doubling the company's valuation since a previous round in March. GV and Samsung NEXT also participated, the Vancouver, Canada-based startup said, declining to specify terms. Altogether, it's raised $27.85 million to date -- while recently passing a milestone in the breeding of unique virtual felines, exceeding 1 million.

Dapper, which grew to fame as that game clogged the Ethereum network last year, plans to use the new funds to open a Los Angeles-based U.S. subsidiary and to release additional games and entertainment apps that run on blockchain, the database technology. Ultimately, it aims to emulate in the blockchain world what Zynga became in social gaming, Dapper Chief Executive Officer Roham Gharegozolou said in a phone interview.

“Everyone thought CryptoKitties was about buying cats,” he said. “But it's only the first step in a bigger vision. We believe that blockchain is going to change the everyday life for everyday people. We see it as a new platform the way social networks were, or the way mobile was a few years ago.”

While more than 1,000 apps have debuted on the Ethereum blockchain, few have managed to snare a significant number of users, according to DappRadar. Exchanges and gambling apps typically rank among the most popular options.

CryptoKitties, which launched in late 2017, helps people create digital cats that are treated like collectibles, with some selling for more than $100,000. Venrock liked the potential to create more compelling collectible experiences.

“This is an enormously big opportunity and, if successful, may be the second blockchain wave adopted by consumers,” David Pakman, a general partner at Venrock, said in a blog post. “Buying and trading cryptocurrencies may be fun for some, but crypto goods promises to be waaaay more fun for the rest of us.”

The new financing includes participation from William Morris Endeavor (WME); eSports leader aXiomatic; and the Andreessen Horowitz Cultural Leadership Fund. The company also disclosed several additional investors from its previous financing round, including Jeffrey Katzenberg's WndrCo; Steve Huffman, the founder and CEO of Reddit; and Green Bay Ventures.

To contact the reporter on this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, David Scheer, Dave Liedtka

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